QUARTERLY REPORT

Transcription

1 QUARTERLY REPORT

2 2014 HIGHLIGHTS The Group s operating revenues in the first quarter amounted to NOK 2,650 million, compared with NOK 2,725 million in the same period in ). Revenues mainly fell due to lower volumes and prices in our retail business. An increase in unrealised gains on electricity contracts helped to offset the reduction. Operating profit in the first quarter was NOK 883 million ( 2013: NOK 678 million), while pre-tax profit amounted to NOK 919 (564) million. The Group s tax expense was NOK 335 (289) million, giving an effective tax rate of 36.5% (51.2%). Net income amounted to NOK 576 (278) million. Agder Energi s operations expose it to risk from changes in electricity prices, electricity generation levels, exchange rates and interest rates. In order to hedge and manage cash flows in these areas, the Group uses hedging instruments. Unrealised gains and losses are measured through profit and loss. Unrealised gains and losses on electricity, currency and interest rate contracts can have a big impact on reported profits. In the first quarter, gains and losses contributed NOK 382 million to pre-tax profit, compared with NOK -36 million in the yearearlier period. Adjusted for unrealised gains and losses, the Group s operating profit was NOK 601 (677) million, pre-tax profit was NOK 537 (599) million and net income from continuing operations was NOK 301 (301) million. In the first quarter, the company generated 2,731 GWh (2,724 GWh) of hydroelectric power. The average spot price (in the NO2 region) was 24.9 øre/kwh (31.1 øre/ kwh), down 20% from the first quarter last year. The Group sold the company Otera Elektro to Bravida in April. In the consolidated financial statements, Otera Elektro is presented under discontinued operations. From now on, Otera will concentrate on developing its subsidiaries Otera Infra, Otera XP and Otera AB. In April we started filling the reservoir behind the Sarvsfossen dam, which is part of the project Brokke Nord/Sør, Skarg power station. The project is progressing to plan, and the facilities will be handed over in the second and third quarters of this year. The project, which is 68.6% owned by Agder Energi, will increase annual power generation in the Otra river system by approximately 175 GWh. In January Rejlers acquired the remaining 51 percent of the shares in Rejlers Consulting, which was previously called Nettkonsult. The Swedish-owned company Rejlers acquired 49 percent of Nettkonsult in Under Norwegian generally accepted accounting practice (NGAAP), Agder Energi s net income in the first quarter was NOK 279 million (controlling interest s share). The equivalent figure for the first quarter last year was NOK 358 million. Key figures Full-year 2013 Operating revenues NOK millions 2, 650 2,725 2,950 9,391 EBITDA NOK millions 1, ,856 Adjusted EBITDA 1) NOK millions ,304 Operating profit NOK millions ,331 Profit before tax NOK millions ,703 Net income NOK millions Cash flow from operating activities NOK millions ,486 Purchase of property, plant, equipment and intangible assets NOK millions ,299 Capital employed 2) NOK millions 12,243 11,213 10,608 11,878 Operating margin % Return on capital employed 3) % Equity ratio % Net interest-bearing liabilities/ Trailing 12-month adjusted EBITDA 4) ) Adjusted EBITDA is corrected for unrealised gains and losses on energy contracts. 2) At the end of the reporting period. 3) Before tax, based on profit/loss and capital employed for the past four quarters. 4) The rolling 12-month adjusted EBITDA is the adjusted EBITDA for the past four quarters. 1) Agder Energi s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The same accounting principles and calculation methods have been applied as for the annual financial statements for The accounts have not been audited. The financial statements of the parent company and subsidiaries adhere to Norwegian generally accepted accounting principles (NGAAP), and the business areas are presented in accordance with NGAAP in the interim report. QUARTERLY REPORT 1 ST QUARTER

3 Operating profits for the quarter Accumulated operating profit Mill.kr. Mill.kr. 1,200 2,500 1,000 2, , , Q2 Q3 Q4 Q2 Q3 Q The Hydroelectric Power and Energy Management business areas The combined operating revenues of these business areas in the first quarter was NOK 844 (870) million, while their operating profit was NOK 564 (609) million. Pre-tax profit amounted to NOK 531 (625) million. The company generated 2,731 GWh (2,724 GWh) of hydroelectric power. In spite of higher power generation than normal, hydrological resources (water and snow) increased further, and were well above normal at the end of the quarter. During the quarter, the average regional electricity price was 24.9 øre/ kwh (31.1 øre/kwh), down 20% from the year-earlier period. However, a strong contribution from the Group s electricity price hedges meant that the prices achieved by the Group fell significantly less than that. The tax expense was NOK 243 (305) million, which meant that the effective tax rate was 45.8% (48.8%). A lower pre-tax profit and lower spot prices meant that both resource rent tax payable and expensed income tax fell. Net income amounted to NOK 288 (319) million. NOK 136 (110) million was invested in property, plant and equipment during the quarter, of which NOK 96 (77) million related to investments in new projects. The new power station Iveland 2 is the main reason for the increase in investment. The Network business area The Network business area is responsible for developing, operating and maintaining the transmission and distribution grid in Aust-Agder and Vest-Agder. This business area had NOK 302 (394) million of operating revenues in the first quarter. Operating profit was NOK 56 (140) million. Lower operating profit was expected, due to a reduction in the income cap. The income cap for any given year depends on the company s own expenses and on overall expenses in the industry two years ago. In 2013 the income cap was exceptionally high due to extraordinary expenses in The 2014 income cap is lower, due to lower expenses in the industry in NOK 88 (75) million was invested in the first quarter, of which NOK 47 (28) million related to investments in new projects. The Market business area The turnover of the Market business area, which consists of LOS, Otera and Agder Energi Varme, was NOK 1,288 (1,661) million in the first quarter. Operating profit was NOK 26 (22) million. LOS s turnover was NOK 998 million in the first quarter, compared with NOK 1,324 million in the year-earlier period. Operating profit was NOK 35 (20) million. LOS supplied 2,683 GWh (3,260 GWh) during that period. The 18% fall in volumes was mainly due to higher temperatures. Otera is an electrical infrastructure contractor. Turnover in the first quarter came to NOK 256 (301) million, and the company made an operating loss of NOK 17 (9) million. Seasonal variations mean that the first quarter is normally the weakest period of the year. After the end of the first quarter, Otera Elektro was sold to Bravida. The company s turnover in 2013 was around NOK 500 million. After the disposal, Otera QUARTERLY REPORT 1 ST QUARTER

4 will concentrate on its core business, which includes high-voltage and lowvoltage power supply, electricity for road and rail, as well as mobile phone and radio networks. Agder Energi Varme s turnover was NOK 33 (36) million, while its operating profit was NOK 8 (10) million. The energy it supplied fell by 12 GWh to 48 GWh (60 GWh). The decrease was due to the mild weather in the first quarter, although this was partly offset by growth in the company s customer base. The company s electricity hedges made a larger positive contribution than in the year-earlier period. Investment in the quarter amounted to NOK 4 (16) million. Cash flows and capital adequacy Cash flow from operating activities came to NOK 527 million in the first quarter, compared with NOK 381 million in the first quarter last year. Cash flow increased mainly on account of a reduction in net working capital. The Group invested NOK 256 (218) million in the first three months of the year. The Hydroelectric Power and Network business areas were responsible for 95% of the investments in property, plant and equipment. Net cash used in investing activities totalled NOK 222 million, compared with NOK 210 million in the first quarter of Net financial income came to NOK 36 million in the first quarter, compared with a net financial expense of NOK 114 million last year. The interest expense on the Group s debt portfolio amounted to NOK 70 (74) million. The Group realised a NOK 4 million loss (NOK 3 million gain) on currency contracts, whereas it made an unrealised gain of NOK 100 million (NOK 36 million loss) on interest rate swaps and currency contracts. The Group s share of losses of associates amounted to NOK 2 (9) million. Average interest-bearing liabilities were NOK 7,480 (6,960) million, and the average interest rate on the debt portfolio was 3.8% (4.3%). The Group had a liquidity buffer of NOK 1,624 (1,436) million at the close of the quarter, consisting of unused credit facilities and unrestricted liquid assets. Operations and working environment At the end of the first quarter the Group had 1,557 (1 501) full-time and temporary employees, representing 1,532 (1,476) full-time equivalents. The reason for the increase is acquisitions in the Group s venture capital portfolios. The sickness absence rate was 4.5% in the first quarter, compared with from 4.1% in the year-earlier period. In the quarter, 8 (10) occupational accidents resulting in injury were recorded. The incidents occurred at Otera (6), Agder Energi Vannkraft (1) and Agder Energi Nett (1). Of the accidents, 7 (6) resulted in total lost time of 37 (76) days. The accident figures are equivalent to a lost time injury frequency (number of LTIs per million work hours) of 10.9 (9.4), a total injury frequency (number of injuries, whether or not they resulted in lost time, per million work hours) of 12.5 (14) and an injury severity rate (number of days lost per million work hours) of 58 (100). Outlook In the first quarter, the price of futures contracts for electricity fell further, indicating low electricity prices for the coming years. At the end of the quarter, the Group s hydrological resources (water and snow) were significantly above normal. Assuming normal precipitation levels, Agder Energi expects to generate more hydroelectric power in 2014 than in We expect our grid operating company to achieve significantly lower profit in 2014 than in The main reason for this is that in 2013 grid operators received a one-off compensation through the income cap for expenses incurred in Kristiansand, 9 May 2014 The Board of Directors of Agder Energi AS QUARTERLY REPORT 1 ST QUARTER

5 INCOME STATEMENT Full-year (Amounts in NOK millions) Energy sales 1,809 2,143 6,278 Transmission revenues ,245 Other operating revenues ,316 Unrealised gains/losses on energy contracts Total operating revenues 2,650 2,725 9,391 Energy purchases ,340-3,920 Transmission expenses Other raw materials and consumables used Employee benefits Depreciation and impairment losses Property taxes and licence fees Other operating expenses Total operating expenses -1,767-2,047-7,060 Operating profit ,331 Share of profit of associates and jointly controlled entities Financial income Unrealised gains/losses on currency and interest rate contracts Financial expenses Net financial income/expenses Profit before tax ,703 Income tax Resource rent tax Tax expense Net income from continuing operations Net income from discontinued operations Net income Of which attributable to non-controlling interests Of which attributable to controlling interest Earnings per share/earnings per share, diluted (NOK) QUARTERLY REPORT 1 ST QUARTER

6 STATEMENT OF COMPREHENSIVE INCOME Full-year (Amounts in NOK millions) Net income Other comprehensive income Cash flow hedges Translation differences Tax impact Total items that may be reclassified to income statement Actuarial gains and losses on pensions Tax impact Total items that will not be reclassified to income statement Total other comprehensive income Total comprehensive income Of which attributable to non-controlling interests Of which attributable to controlling interest QUARTERLY REPORT 1 ST QUARTER

7 STATEMENT OF FINANCIAL POSITION (Amounts in NOK millions) Deferred tax assets Intangible assets Property, plant and equipment 12,076 11,297 11,979 Investments in associates and jointly controlled entities Other non-current financial assets Total non-current assets 13,410 12,584 13,324 Inventories Receivables 1,247 1,967 1,677 Derivatives 1, ,022 Cash and cash equivalents Total current assets 2,641 2,732 2,767 Assets of discontinued operations TOTAL ASSETS 16,143 15,316 16,091 Paid-in capital 1,907 1,907 1,907 Retained earnings 2,778 2,225 2,217 Non-controlling interests Total equity 4,754 4,184 4,210 Deferred tax Provisions 1,086 1,337 1,134 Interest-bearing non-current liabilities 6,022 5,093 5,931 Total non-current liabilities 7,706 6,856 7,585 Interest-bearing current liabilities 1,467 1,936 1,737 Tax payable Derivatives Other non-interest-bearing current liabilities 1,137 1,431 1,324 Total current liabilities 3,612 4,276 4,296 Liabilities of discontinued operations TOTAL EQUITY AND LIABILITIES 16,143 15,316 16,091 QUARTERLY REPORT 1 ST QUARTER

8 STATEMENT OF CASH FLOWS Full-year (Amounts in NOK millions) Cash flow from operating activities Profit before tax from continuing operations ,703 Profit before tax from discontinued operations Depreciation and impairment losses Unrealised gains/losses on energy, currency and interest rate contracts Share of profit of associates and jointly controlled entities Loss/gain on disposals Tax paid Change in trade receivables Change in trade payables Change in net working capital, etc Net cash provided by operating activities ,486 Investing activities Purchase of property, plant, equipment and intangible assets ,299 Purchase of businesses/financial assets Net change in loans Sale of property, plant, equipment and intangible assets Sale of businesses/financial assets Net cash used in investing activities ,355 Financing activities New long-term borrowings ,933 Repayment of long-term borrowings ,835 Net change in current liabilities Dividends paid Net cash used in financing activities Net change in cash and cash equivalents Cash and cash equivalents at start of period Cash and cash equivalents at end of period QUARTERLY REPORT 1 ST QUARTER

9 STATEMENT OF CHANGES IN EQUITY Paid-in Cash Trans- Retained Total for Non- Total capital flow lation earnings controlling controlling equity (Amounts in NOK millions) hedges differences interest interests Equity at 01/01/2013 1, ,923 3, ,917 Net income for the year Other comprehensive income and expenses Dividends paid Other changes in equity Equity at 31/12/2013 1, ,284 4, ,210 Equity at 01/01/2014 1, ,284 4, ,210 Net income for the year Other comprehensive income and expenses Dividends paid Other changes in equity Equity at 31/03/2014 1, ,862 4, ,754 QUARTERLY REPORT 1 ST QUARTER

10 BUSINESS AREAS NET INCOME UNDER NGAAP Full-year (Amounts in NOK millions) Hydroelectric power and energy management Network Market Parent company/other/eliminations Group (NGAAP) Of which attributable to non-controlling interests Of which attributable to controlling interest OPERATING PROFIT UNDER NGAAP Full-year (Amounts in NOK millions) Hydroelectric power and energy management ,462 Network Market Parent company/other/eliminations Group (NGAAP) ,870 RECONCILIATION WITH GROUP S REPORTED OPERATING PROFIT Full-year (Amounts in NOK millions) Operating profit (NGAAP) ,870 Adjustment for differences arising from: Energy sales Surplus/shortfall in transmission revenues Goodwill amortisation and impairment Discontinued operations 1) Other Operating profit (adjusted IFRS) ,779 Unrealised gains/losses on energy contracts Operating profit under IFRS ,331 1) Refers to operating profit of discontinued operations. Under IFRS, discontinued operations are presented on a separate line and are therefore not included in the operating profit. QUARTERLY REPORT 1 ST QUARTER

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12 Agder Energi P.O.Box 603 Lundsiden, 4606 Kristiansand Visiting adress (head office): Kjøita 18, 4630 Kristiansand Tel. no.: Organisation number: NO Agder Energi owns a 68.6 percent interest in Otra Kraft, which is developing Skarg power station (Brokke Nord/Sør) at Bykle in the Setesdal valley. At Sarvsjuvet, a 50 metre high dam is being built. This project will increase Agder Energi s annual electricity generation by 175 GWh, equivalent to the consumption of detached houses. Photo: Agder Energi